FX levels to watch – EUR/USD, USD/JPY, AUD/USD

Better eurozone news is lifting the euro, while the Aussie’s rally shows no sign of stopping. 

GBP/EUR coins
Source: Bloomberg

EUR/USD bullish outlook

Dips continue to be bought here, with a flow of good economic news helping to lift EUR/USD once more. It looks like the buyers are already in full flow this morning, and $1.13 is now within touching distance.

The pair has been moving in an almost vertical line, so a more dramatic retracement could be in the offing, but it would need a drop through $1.10 to really reverse the bullish outlook.

EUR/USD chart

USD/JPY expects to recover some lost ground

The pair has firmly entered a consolidation period, but the question is still whether this will resolve to the upside or downside. While ¥111.68 has held as resistance, there has been little desire over the past few sessions to move towards the next area of support at ¥110.

A broader risk rally seems to be in the offing, helped by USD strength, so it would make sense to see USD/JPY recover some lost ground. A break above ¥111.68 would head towards the 100-day simple moving average (SMA) at ¥112.64, and then on to ¥114.40. A bigger bearish move needs a daily close below ¥110, and also below the 200-day SMA at ¥109.88.

USD/JPY chart

AUD/USD pushes higher

AUD/USD rally shows no sign of stopping, dips have been firmly bought for two weeks now, so further retracements in the direction of the (admittedly rather steep) trendline off the May lows should see further buying.

The next target is the 200-day SMA at $0.7537, with $0.7552 and then $0.7584 the next areas on the upside. A drop below $0.7440 would be the necessary first step in a bearish direction. 

AUD/USD chart

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